Strength in the Dax: Is the breakout in Germany’s leading index convincing?
The leading German index traded last week within a very narrow range until Thursday.
Last Friday was an expiration day on the German trading floor. This spurred the market on to surpass the 11000 range for over a month.
This 11000 range will become an essential area in this trading week. The market has to defend it. If this succeeds, the price targets of up to 11400 might be possible initially.
This Monday is a holiday in the US (Martin Luther King Day) so the Dax has to get by without the backing of S&P500 and Dow at the beginning of the week.
Important economic data already came from China this morning. The ZEW Survey will be released on Tuesday. The ECB will announce its interest rate decision and the Monetary Policy Statement and a press conference on Thursday. Moreover, the IFO Business Climate is published on Friday.
Additionally, there is the issue of Brexit, which could likewise be an essential source of impetus in this and the coming weeks.
Chart-wise, critical areas for further rising prices are the round number 11000 and 11150, which both serve as support and resistance.
If the market breaks out of this barrier, there would be two possible price targets. The range around 11400 and this should be mastered, the field around 11760.
If the market falls below the 11K mark again, the 10800 and the 10600 come into focus. If the market drops significantly below the 10600 to 10550 range, at that point, it is likely that the market would reveal new lows.
GER30 – Dax – daily chart. Source: ActivTrader
Written by Daniel Schuetz, External Analyst
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